Islamabad, June 9, 2025 – Large Scale Manufacturing (LSM) has posted its third straight year of negative growth, marking a continuing trend of contraction within Pakistan’s industrial landscape, according to the Economic Survey of Pakistan 2024-25 released on Monday.
The economic survey highlights that during the period from July to March FY 2024-25, LSM output shrank by 1.47%, a sharper decline compared to the marginal drop of 0.22% recorded in the same period last year. This persistent downturn in LSM underscores underlying structural inefficiencies, rising input costs, energy constraints, and sluggish performance in key industrial segments such as Food, Chemicals, Iron & Steel, and Electrical Equipment.
“This marks the third consecutive year of negative LSM growth,” the economic survey noted, attributing the trend to a combination of domestic and global headwinds that have hindered industrial recovery.
Despite the overall contraction, nearly 50% of the monitored LSM sub-sectors recorded positive growth. Notable improvements were observed in Wearing Apparel, Textiles, Pharmaceuticals, Automobiles, and Coke & Petroleum Products. These industries provided partial offsets to the broader manufacturing decline and reflect pockets of resilience within the industrial economy.
In March 2025, LSM output showed a year-on-year (YoY) increase of 1.8%, slightly above the 1.7% YoY growth recorded in March 2024. However, on a month-on-month (MoM) basis, LSM declined by 4.6% in March, following a 5.6% drop in February, signaling continued volatility in industrial output.
The Economic Survey also reported a contraction in the Mining and Quarrying sector, which declined by 3.4% in FY 2025. This represents a slight recovery from a 4.0% fall in the previous year. Reductions were noted in the extraction of crude oil (-14.8%), natural gas (-6.8%), coal (-5.7%), and iron ore (-20.2%). In contrast, several non-metallic minerals such as sulphur, dolomite, limestone, marble, and ocher witnessed strong growth, signaling localized improvements in mineral production.
In summary, the Economic Survey 2024-25 paints a mixed picture for the LSM sector. While headline figures remain negative, signs of recovery in select industries suggest potential for stabilization if supported by strategic economic reforms and industrial policy realignment.